Bank of America Raises ASML Target: Is Another 20% Upside Possible by 2026?

Bank of America expects further gains in ASML shares.
Analyst Didier Sesama reaffirmed a “buy” rating for the semiconductor equipment supplier, naming it his top sector pick as well as one of his leading positions for 2026. He raised his price target to $1,331 from the previous $1,134, implying potential upside of around 20%.

Sesama believes ASML shares could continue rising, as the expected increase in so-called lithography intensity will allow the company to gain a larger market share in the DRAM segment. He projects this share could reach around 26% by 2028.

Investors had recently worried that lithography intensity—the portion of chipmakers’ capital expenditure devoted to lithography systems—might start declining. “After 12–18 months of debate around this metric, we believe the trend is turning positive,” Sesama wrote.

Other risks, related to high customer concentration and the Chinese market, are also beginning to ease.

“The risk from customer concentration is decreasing, as Samsung regains competitiveness, Micron accelerates EUV system deployment, Intel stabilizes, and AI chipmakers move to leading N-nodes to differentiate,” the analyst notes. “China’s contribution is expected to normalize to low- to mid-20% of sales, easing concerns about a sharp slowdown and severe export restrictions.”

Sesama expects ASML’s gross margins to expand from 2027, providing an additional boost to the shares. This significant improvement will be supported by a better product mix.

“Overall, we expect investor perception of ASML to shift from a ‘lagging relative to other fab equipment’ story to a ‘positive’ story, supported by a gross margin expansion of 500 basis points by 2030 and a five-year average annual EPS growth of 18%,” he adds.